8 Things that could disqualify you from collecting on your long term care (LTC) insurance

Making a claim on your long-term care (LTC) insurance and receiving benefits ought to be straightforward. Unfortunately, that isn’t always the case. There are several common reasons you could be disqualified from collecting on your LTC insurance.

It’s not about whether or not you qualify for long-term care benefits but rather on making the claim properly. Here are a number of tips on how to claim your policy benefits and what to avoid.

Activities of daily living

Your eligibility for benefits is triggered if you can’t perform 2 of 6 activities of daily living (ADL) or you are suffering cognitive impairment, such as with dementia or Alzheimer’s.

You may be eligible to claim benefits from your LTC insurance policy if you need help or supervision to perform at least 2 of these tasks:

• Bathing
• Toileting
• Eating
• Dressing
• Mobility
• Personal hygiene

Many LTC insurance plans will also pay if, because of cognitive impairment, you’re a danger to yourself or others. Typically, cognitive impairment is due to dementia or Alzheimer’s, but any mental decline may qualify if the insurer covers it.

You’ll need a written statement from your doctor saying you can’t perform at least 2 of the 6 functions. She’ll also need to affirm that you’ll be unable to perform these ADLs for at least 90 days or more.

You’re selecting an ineligible long-term care provider

Most long-term care insurance policies require that your chosen provider has the specific license and the appropriate staffing qualifications and levels required to provide the care you need. Read your policy carefully, especially the insurance company’s definition of eligible LTC provider. If you are unsure, call—or better still, write—the company for a decision on the facility you’re considering.

Be aware that some insurers insist that the facility meet current criteria, even if your policy hasn’t spelled it out. You may be able to appeal the insurer’s decision because the policy wasn’t written to include those criteria when you purchased the policy. Keep in mind that insurers can update their criteria if they have given written notice of the change—keep all notices of changes of terms to protect yourself and stay fully informed of your coverage.

Advance research into a facility’s standing as an eligible LTC provider is a must. Don’t rely solely on a provider’s representations of coverage; always check with the insurer ahead of time.

“Gatekeeper” provisions include no previous hospitalization

Also known as a gatekeeper provision, the provision’s wording is such that hospitalization, a stay in a nursing home, or both are required.

A gatekeeper isn’t an individual; instead, it means there are requirements to meet before claiming and receiving a payout for long-term care. In this case, the gatekeeper is a requirement for prior hospitalization or a stay in a skilled nursing facility or nursing home.

Older policies can contain this language, which most states have outlawed for years. Without knowing how to look for it, it could be easily overlooked and cause delays in getting your claim settled.

Personal care benefits must be specified carefully with your insurance provider.

While your LTC insurance may say it doesn’t pay for personal care, light housekeeping, or running errands, it is sometimes possible if you meet the policy’s ADL requirements.

Your policy may also exclude any care provided by the family. However, there is sometimes a workaround. Specific language may exclude your spouse, in-laws, or siblings, but a grandchild, niece, or nephew may qualify.

Failure to pay premiums on your LTC insurance plan

If you or your loved one forgets to pay the LTC insurance premiums because of cognitive impairment, many states allow up to 5 months’ arrears before the policy lapses. If you can provide a doctor’s statement to that effect within that timeframe, the insurance company will reinstate the policy.

Elimination period

An Elimination Period is similar to other kinds of insurance deductibles; the policy may require you to pay out-of-pocket for covered services for a specified length of time. The period may be up to 180 days; check your policy for the specific Elimination Period.

It’s essential to plan for and manage the Elimination Period on your insurance plan. If you wait too long to satisfy the period, it can mean you pay more out-of-pocket. If cash is tight, try to arrange to pay over time.

Plan of care insurance requirements

In addition to an ADL triggering event that lasts at least 90 days, which requires a physician’s statement, you’ll need a written Plan of Care, something most policies require.

A Plan of Care is a written statement of your needs, as identified by your doctor(s). It not only identifies those needs but also outlines the type of support you need and why. It also will include details about how often you’ll need the help and who should provide that support.

You may need to hire a plan coordinator to write your plan because they are most familiar with an LTC insurer’s requirements. Failure to submit a Plan of Care often results in denial of your claim, as will a poorly drafted plan.

Short-term care

As the term implies, short-term care is usually for incapacitating illnesses lasting 90 days or less. An LTC insurance policy is for periods of incapacity that last longer than 90 days—making a claim for anything less will result in denial of your claim.

Insurance claim submission mistakes

It may seem easy enough to fill out a claim form, but it’s all too easy to make mistakes. Errors can lead to delays, rejections, or re-submissions.

In most cases, your long term care insurance policy has a specified time limit on filing. Failure to file within that time probably means your claim will be denied.

You should also attach proof that you are filing on time when you submit your claim. If you are using USPS, send your claim form via registered mail, with a return receipt requested. If you submit your claim online, be sure to have confirmation sent to your email so that you have proof of timely submission.

Pay attention to the details on the claim form; mistakes here are one of the common reasons claims are denied. Don’t leave anything out because omissions can also result in a denial. If you need more space than the form provides, attach an extra page with the full, current information.

Ensure the personal details—name, address, and date of birth—are correct, especially if you are filing on behalf of a loved one. If you are applying on behalf of a loved one, if possible, have a signed statement authorizing you to act on your relative’s behalf. It doesn’t necessarily have to be a Power of Attorney.

Claim denials happen for 2 major reasons: Failure to meet your policy’s requirements and definitions and omitting relevant information. LTC insurance providers are in the business of selling insurance; they are likely to avoid paying claims if at all possible. It takes attention to detail, patience, and perseverance to navigate a company’s claim process. An attorney or insurance filing service specializing in long-term care claims can help you make a claim successfully.